Correlation Between Maxar Technologies and Comtech Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Maxar Technologies and Comtech Telecommunicatio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Maxar Technologies and Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maxar Technologies and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Maxar Technologies and Comtech Telecommunicatio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Maxar Technologies with a short position of Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxar Technologies and Comtech Telecommunicatio.

Diversification Opportunities for Maxar Technologies and Comtech Telecommunicatio

0.09

Correlation Coefficient

Maxar Technologies  Comtech Telecommunicatio

Significant diversification

The 3 months correlation between Maxar and Comtech is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Maxar Technologies and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio and Maxar Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Maxar Technologies are associated (or correlated) with Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Maxar Technologies i.e., Maxar Technologies and Comtech Telecommunicatio go up and down completely randomly.

Pair Corralation between Maxar Technologies and Comtech Telecommunicatio

If you would invest  327.00  in Comtech Telecommunications Corp on September 14, 2024 and sell it today you would earn a total of  11.00  from holding Comtech Telecommunications Corp or generate 3.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Maxar Technologies  vs.  Comtech Telecommunications Cor

Maxar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maxar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Maxar Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Comtech Telecommunicatio

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Comtech Telecommunicatio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maxar Technologies and Comtech Telecommunicatio

The main advantage of trading using opposite Maxar Technologies and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxar Technologies position performs unexpectedly, Comtech Telecommunicatio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Comtech Telecommunicatio will offset losses from the drop in Comtech Telecommunicatio's long position.

The idea behind Maxar Technologies and Comtech Telecommunications Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.